They will not lose all of their gains against Sony. The first year of a console has limited supply over demand. (Even the Wii U was selling out at first last year) so cutting price would not change the result significantly.

True gamers spread the word, but X1 gamers will probably be just as satisfied as PS4 gamers and because of the limited supply I don't see much opportunity to sell all gamers a console in the first year. Then, E3 will happen next year... That is where the real fight begins.

Price is an advantage of Sony's but like last generation, MS will drop the price $100 when the real big games start coming out. The first holiday season is not strong for the games on either console. Sony has a lot of quantity but most are ports from another platform or next iterations of existing IPs. On the MS side, they avoided a large number of ports, but do not have their biggest AAA studios releasing much.

The first year of the console cycle is a "transition" period. Not enough consoles will be sold to justify a AAA investment of $100 million when you are going to sell a maximum of 5 million consoles during the holidays. Year 2 and 3 is when the consoles drop in price and sales skyrocket. At that point you have to be really ready to push your console.

It's hard to call because we don't know how much of a loss they are making currently on each Xone. If they are already making a $100 loss I don't think they want to see it double.

Other than the Kinect, there is little about the XBO's tech which could be considered superior :P We know for a fact the PS4 is more powerful, the only question right now is by how much.

Agreed. I imagine that this is also the reason behind the kinect-less SKU.

The difference there is the 3DS did not have a competitive hand held released within a month of its release that was comparable and less expensive.  The 3DS struggled out of the gate and was a successor to the best selling hand held ever and was lone system in its market.  

The question between the X1 and PS4 is if the first 18 months of sales will dictate the following 5 years or not. Can Microsoft afford to be behind 2:1 ratio in even 6 months if they wish to sell more systems this coming generation?

Not going to happen. The Xbox One will sell out this holiday season at $499. Next year will be slow for both consoles from spring until early fall at the price points. People are acting like $399 is cheap. Neither console will explode until they hit the $299 price point. Microsoft would be smart to drop it to $399 next year before Halo releases. If they really want to dominate next holiday then pack in Titanfall for $399.

It would be cool and all but I just don't see it happening. Like others have said, they will sell out initially regardless so why not capitalize on that. They can save the price drop for later on when the launch dust settles.

Per the BOLD: For the core gamers, you are 100% correct.  The problem is that the core isn't the big part of the market, they are your first 6-12 months buyers.  The second tier group "regular gamers - COD/Battlefield/Halo" they probably will buy what their friends are buying and will know the difference in between the consoles, but will decide based on their $$$ and the media sway.  The last group are the "pure casuals", they buy what they think their kids want based on what the media tells them - the most popular.  Seeing as how about half of the consoles sold fall into the last group, Sony hasn't won anything yet.  Look at the wii, that's proof in itself that the public is easily swayed, and you never really know what they will fall for.

Yes but kinect is more important to microsoft then the one is.

Definately not lowering the price for X1. They will sell out during christmas and also have the option of lowering their prce if sales start to slow down. Sony will not have that flexibility and it is alot easier to sell a price reduction after launch than before.